Posted: February 3, 2012
NFDA, along with 32 other national small business associations, recently sent a letter urging members of the Senate Banking Committee to ensure that the new Consumer Financial Protection Bureau (CFPB) follows the Small Business Regulatory Flexibility Act (SBREFA), which outlines a procedure intended to minimize the costs of complying with federal regulations for small businesses.
The amendment to the law, supported by NFDA, was authored by Sens. Olympia Snowe (R-ME) and Mark Pryor (D-AR) and would: "1) require the CFPB to publicly consider how rules will impact the cost of credit for small firms; and 2) require the CFPB to conduct Small Business Advocacy Review ("SBAR") panels on all rules that will impact small businesses".
This process is especially important for funeral homes that either extend credit to families to pay for their funerals or make pre-need arrangements that require an advance payment.
The letter goes on to say that "The SBAR panel process, originally enacted into law by the 1996 Small Business Regulatory Enforcement Fairness Act ("SBREFA"), lays out a procedure that is intended to minimize regulatory costs on small businesses. These panels are made up of small business representatives and are facilitated by the Small Business Administration's Office of Advocacy. SBAR panels are responsible for issuing a small business report prior to the promulgation of a proposed rule. The small business report contains recommendations on alternatives that can meet the CFPB's objectives while minimizing costs on small businesses. "
NFDA strongly believes that SBREFA, if implemented correctly, will allow for the CFPB to present small business-friendly options for comment during the rulemaking process. This approach treats trade and membership organizations, such as NFDA, as partners that share the goal of ensuring final regulation maximizes benefits and minimize costs.
Several years ago, NFDA participated in a SBREFA process with the Environmental Protection Agency when they were seeking to increase regulations on Class V injection wells (septic systems). NFDA's participation, with the help of the Small Business Administration's Office of Advocacy, was successful in preventing additional regulation on funeral homes. We know the process works and can be a valuable tool for ensuring that federal agencies adopt alternative, less costly regulations or to exempt small business from a proposed regulation altogether.
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